Li-Cycle Holdings Corp (LICY) 2023 Q1 法說會逐字稿

Good day. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2023 Li-Cycle Holdings Earnings Call and Webcast. (Operator Instructions)

再會。我叫托德，今天我將擔任你們的會議接線員。此時，我想歡迎大家參加 2023 年第一季度 Li-Cycle Holdings 財報電話會議和網絡直播。 （操作員說明）

I will now turn the call over to Nahla Azmy, Head of Investor Relations. Please go ahead.

我現在將把電話轉給投資者關係主管 Nahla Azmy。請繼續。

Thank you. Good morning, and thank you, everyone, for joining us today for Li-Cycle's review of our business and financial results ended March 31, 2023. We will start today with formal remarks from Ajay Kochhar, Co-Founder, President and Chief Executive Officer; Tim Johnston, Co-Founder and Executive Chairman; and Debbie Simpson, Chief Financial Officer. We will then follow with a Q&A session.

謝謝。早上好，感謝大家今天加入我們，參加 Li-Cycle 對我們截至 2023 年 3 月 31 日的業務和財務業績的審查。今天我們將從聯合創始人、總裁兼首席執行官 Ajay Kochhar 的正式講話開始;蒂姆·約翰斯頓，聯合創始人兼執行主席；首席財務官黛比·辛普森 (Debbie Simpson)。然後我們將進行問答環節。

Ahead of this call, life cycle issued a press release and a presentation, which can be found on the Investor Relations section of our website at investors.li-cycle.com. On this call, management will be making statements based on current expectations, plans, estimates and assumptions, which are subject to significant risks and uncertainties and most of which are difficult to predict and many of which are beyond the control of Li-Cycle. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect including because of factors discussed in today's press release during this conference call and in our past reports and filings with the U.S. Securities and Exchange Commission and the Ontario Securities Commission in Canada. These documents can be found on our website at investors.li-cycle.com. We do not undertake any duty to update any forward-looking statements, whether written or oral made during this call or from time to time to reflect new information, future events or otherwise, except as required.

在此電話會議之前，生命週期發布了新聞稿和演示文稿，可在我們網站 investors.li-cycle.com 的投資者關係部分找到。在這次電話會議上，管理層將根據當前的預期、計劃、估計和假設做出陳述，這些預期、計劃、估計和假設受到重大風險和不確定性的影響，其中大部分難以預測，其中許多超出了 Li-Cycle 的控制範圍。如果我們的任何關鍵假設不正確，包括由於本次電話會議期間今天的新聞稿中討論的因素以及我們過去向美國證券交易委員會和安大略證券提交的報告和文件中討論的因素，實際結果可能與我們的前瞻性陳述存在重大差異加拿大委員會。這些文件可以在我們的網站 investors.li-cycle.com 上找到。我們不承擔更新任何前瞻性陳述的義務，無論是在本次電話會議期間或不時作出的書面或口頭陳述，以反映新信息、未來事件或其他情況，除非有要求。

With that, I'm pleased to turn the call to Ajay.

有了這個，我很高興把電話轉給 Ajay。

Thank you, Nahla, and good morning, everyone. Aligning our reporting schedule with those of our peers and investors, we're excited to be reporting our first calendar quarter of 2023. This morning, we'll provide a review of our results and the ongoing progress on our Spoke & Hub network.

謝謝你，Nahla，大家早上好。為了使我們的報告時間表與同行和投資者的報告時間表保持一致，我們很高興能夠報告 2023 年第一個日曆季度。今天上午，我們將回顧我們的結果以及 Spoke & Hub 網絡的持續進展。

Turning to Slide 3. We continue to execute on our strategic objectives, as a leading solutions provider in the sustainable domestic EV battery supply chain in both North America and Europe. I would like to highlight some of the recent key achievements that we'll discuss in greater detail on this call.

轉到幻燈片 3。作為北美和歐洲可持續國內 EV 電池供應鏈的領先解決方案提供商，我們將繼續執行我們的戰略目標。我想強調我們將在本次電話會議上更詳細討論的一些最近的關鍵成就。

On the commercial front, we signed a definitive long-term agreement with VinES, a battery manufacturer. Beginning in 2024, Li-Cycle will become their preferred recycling partner for Vietnamese-sourced battery materials. In the interim, manufacturing scrap from VinES' presence in Vietnam will be directed to Li-Cycle's North American Spokes. Over the longer term, we see the opportunity to establish a dedicated Spoke near VinES' manufacturing site with a decision anticipated by 2025.

在商業方面，我們與電池製造商 VinES 簽署了最終的長期協議。從 2024 年開始，Li-Cycle 將成為他們首選的越南電池材料回收合作夥伴。在此期間，VinES 在越南的生產廢料將被送往 Li-Cycle 的北美輻條。從長遠來看，我們看到了在 VinES 製造基地附近建立專用 Spoke 的機會，預計將在 2025 年做出決定。

From an operational perspective, we continue to grow our network strategically, marrying customer demand. In Northern America, our four operational Spokes are delivering solid performance, and we are progressing the plan to ensure ample availability of feedstock for our first commercial hub in Rochester, New York. which remains on track to commence commissioning in late 2023. We continue to achieve higher operating rates in our North American Spoke network while also exploring a new site in Ontario. In Europe, we are replicating the modular approach to network growth that we've successfully deployed in North America. We have three Spokes in development with our Germany Spoke on track to commence operations in mid-2023.

從運營的角度來看，我們繼續戰略性地發展我們的網絡，以滿足客戶的需求。在北美，我們的四個運營分支正在提供穩定的性能，我們正在推進計劃以確保我們在紐約羅切斯特的第一個商業中心有充足的原料供應。該網絡有望在 2023 年底開始調試。我們繼續在北美輻條網絡中實現更高的運營率，同時還在安大略省探索新站點。在歐洲，我們正在復制在北美成功部署的模塊化網絡增長方法。我們正在開發三個 Spoke，我們的 Germany Spoke 有望在 2023 年年中開始運營。

We're excited to announce the partnership with Glencore to co-develop our first European Hub, expected to be the largest resource recovery facility on the continent, producing critical battery materials.

我們很高興地宣布與嘉能可合作，共同開發我們的第一個歐洲中心，該中心有望成為歐洲大陸最大的資源回收設施，生產關鍵電池材料。

Finally, on the financial front. We've progressed the work required to close the U.S. Department Energy's $375 million loan commitment, which we expect will occur in mid-2023.

最後，在財務方面。我們已經推進了完成美國能源部 3.75 億美元貸款承諾所需的工作，我們預計這將在 2023 年年中完成。

Turning to Slide 4 for a recap of Li-Cycle's positioning at the center of the battery material supply chain and an overview of our value proposition. It's important to note that we maintain our flexibility to service all types of customers in the battery supply chain with a pure-play recycling and resource recovery focus that complements and doesn't compete for their businesses. We are providing an integrated battery materials platform for global customers by closing the supply chain loop at a local level. The logistics and handling know-how, innovative and sustainable technology and a growing network, Li-Cycle is advancing as a global partner of choice with diversified customers across the battery value chain including active material manufacturers, battery and EV OEMs.

轉到幻燈片 4，回顧 Li-Cycle 在電池材料供應鏈中心的定位，並概述我們的價值主張。重要的是要注意，我們保持靈活性，為電池供應鏈中的所有類型的客戶提供服務，專注於純粹的回收和資源回收，補充而不是競爭他們的業務。我們通過在本地層面關閉供應鏈循環，為全球客戶提供一個集成的電池材料平台。憑藉物流和處理專業知識、創新和可持續技術以及不斷發展的網絡，Li-Cycle 正在成為全球首選合作夥伴，與包括活性材料製造商、電池和 EV 原始設備製造商在內的電池價值鏈中的多元化客戶合作。

Turning to Slide 5 for an update on the total addressable market, or TAM, for battery materials available for recycling. We continue to see robust demand and expanding market for recycling of all forms of lithium-ion batteries. Near-term growth is largely being driven by gigafactory announcements through 2025 and supplemented by growth in end-of-life battery feedstock towards the end of the decade. Bolstering the outlook for Li-Cycle is the limited supply of alternative post processing capacity coming online in the near term relative to Li-Cycle's timing and progress and general market development. This is likely to be even more pronounced towards the end of the decade.

轉到幻燈片 5，了解可回收電池材料的總可尋址市場 (TAM) 的更新。我們繼續看到各種形式的鋰離子電池回收的強勁需求和不斷擴大的市場。近期增長主要由到 2025 年的超級工廠公告推動，並輔以到本十年末報廢電池原料的增長。相對於 Li-Cycle 的時機和進展以及總體市場發展，近期上線的替代後處理能力供應有限，這支撐了 Li-Cycle 的前景。到本世紀末，這種情況可能會更加明顯。

Turning to Slide 6 to discuss the modular approach that we've implemented to pursue our Spoke & Hub network growth strategy. As you discussed on our transition earnings call in March, our successful template in North America has solidified our position as the leading recycler in the region. To review, we seek to develop a Spoke network strategically located near customers to secure sustainable long-term feedstock supply in a manner that reduces handling costs and operational risk. These investments are underpinned by both multiyear intake and offtake commercial contracts. To close the loop, we utilize centralized large-scale refining hub facilities strategically located to leverage existing infrastructure.

轉到幻燈片 6，討論我們為追求 Spoke & Hub 網絡增長戰略而實施的模塊化方法。正如您在 3 月份的過渡收益電話會議上討論的那樣，我們在北美的成功模板鞏固了我們作為該地區領先回收商的地位。回顧一下，我們尋求開發一個戰略性地位於客戶附近的 Spoke 網絡，以確保可持續的長期原料供應，從而降低處理成本和運營風險。這些投資以多年的進口和承購商業合同為基礎。為了關閉循環，我們利用位於戰略位置的集中式大型煉油中心設施來利用現有基礎設施。

Lastly, we optimized our capital structure with strategic financing. Similar to recently announced DOE loan commitment. Notably, this is a replicable and scalable model. We are now extending this model into Europe.

最後，我們通過戰略融資優化資本結構。類似於最近宣布的能源部貸款承諾。值得注意的是，這是一個可複制和可擴展的模型。我們現在正在將這種模式擴展到歐洲。

Let me now turn it over to Tim for an update on our Spoke & Hub network.

現在讓我把它轉交給蒂姆，了解我們的 Spoke & Hub 網絡的更新。

Thanks, Ajay.

謝謝，阿傑。

Turning to Slide 7 for key updates on our Rochester Hub. The aerial view of the Rochester Hub that you see here was taken at the end of April and reflects the significant progress that our team has made in just two months' time. All aspects of construction are moving in parallel and in line with our expectations, which demonstrates the strength and expertise of our team.

轉到幻燈片 7，了解我們羅切斯特中心的重要更新。您在這裡看到的 Rochester Hub 鳥瞰圖是在 4 月底拍攝的，反映了我們團隊在短短兩個月的時間裡取得的重大進展。建設的各個方面都在並行並符合我們的期望，這表明了我們團隊的實力和專業知識。

Turning to Slide 8 for further details on construction progress. First, as we've consistently shared, the Hub is on track to commence commissioning in May 2023 and is currently tracking at the higher end of the previously disclosed construction cost range. Early on, a key aspect of our construction strategy was to accelerate the procurement of long-lead equipment and construction materials such that they would arrive on site well ahead of when they are anticipated to be needed. Strategically, this has proven to be a significant advantage both in terms of our ability to maintain our project schedule and our ability to remain within budget, particularly in light of the challenging inflationary and supply chain environment.

轉到幻燈片 8 了解有關施工進度的更多詳細信息。首先，正如我們一直分享的那樣，該樞紐有望在 2023 年 5 月開始調試，目前正在跟踪先前披露的建設成本範圍的較高端。早期，我們建設戰略的一個關鍵方面是加快採購長周期設備和建築材料，以便它們能夠在預計需要的時間之前到達現場。從戰略上講，這已被證明在我們維持項目進度和保持在預算範圍內的能力方面都是一個顯著優勢，特別是考慮到充滿挑戰的通貨膨脹和供應鏈環境。

As a result of our actions in 2021, three of our key process buildings are now nearing completion and the construction of our warehouse is substantially finished. As we discussed in our transition period call, our remaining budget will be influenced by labor costs and productivity.

由於我們在 2021 年採取的行動，我們的三座關鍵工藝建築現已接近完工，我們的倉庫建設也已基本完成。正如我們在過渡期電話會議中討論的那樣，我們的剩餘預算將受到勞動力成本和生產力的影響。

Turning to Slide 9 for a view of our expanding global footprint with localized networks. As a reminder, our strategy is to be the preferred global recycling partner with a leading domestic supply solution in each of the key growth regions. As illustrated on the slide, there is robust demand in both North America and Europe for recycling services driven by a significant increase in gigafactory capacity. All to our competitive advantage is our commitment to consistent execution.

轉到幻燈片 9，了解我們通過本地化網絡不斷擴大的全球足跡。提醒一下，我們的戰略是成為首選的全球回收合作夥伴，在每個主要增長地區提供領先的國內供應解決方案。如幻燈片所示，在超級工廠產能顯著增加的推動下，北美和歐洲對回收服務的需求強勁。我們對一致執行的承諾是我們競爭優勢的全部。

Expanding our network footprint we are embarking on a partnership for a definitive feasibility study with Glencore to codevelop a new European Hub, which we will discuss in more detail shortly.

為了擴大我們的網絡足跡，我們正著手與 Glencore 合作進行最終可行性研究，以共同開發一個新的歐洲樞紐，我們將在短期內對此進行更詳細的討論。

Turning to Slide 10 for an update on our European Spoke network, which is anchoring our growth in the continent. The development of our European Spokes is progressing well. We continue to expand the deployment of our third-generation standardized module Spoke processing plants. To provide a brief update on our three European spokes. In Germany, construction is on track with commissioning of the first processing line expected in mid-2023, with the second line expected to follow in the second half of this year. In France, with site and building secured coupled with commercial battery source contracts, we are progressing procurement and engineering activities and expect to commence operations in the first half of 2024. In Norway, the construction of the Spoke building is on track for completion in the second half of this year. Ahead of installing the processing line, we intend to use the location as a consolidation facility to support our Germany Spoke.

轉到幻燈片 10，了解我們歐洲輻射網絡的最新情況，該網絡正在鞏固我們在歐洲大陸的增長。我們歐洲輻條的開發進展順利。我們繼續擴大我們第三代標準化模塊輻條加工廠的部署。簡要介紹我們的三個歐洲輻條。在德國，第一條加工線預計將於 2023 年年中投產，建設工作正按計劃進行，第二條生產線預計將於今年下半年投產。在法國，隨著場地和建築的安全以及商業電池來源合同的獲得，我們正在推進採購和工程活動，預計將於 2024 年上半年開始運營。在挪威，Spoke 大樓的建設有望在 2024 年完工。今年下半年。在安裝加工線之前，我們打算將該地點用作整合設施，以支持我們的德國分支。

Turning to Slide 11. We're excited to announce our partnership with Glencore to jointly study the feasibility of a new hub at an existing Glencore site in Portovesme, Italy. In line with our approach, we are extending our modular strategy from North America to Europe by developing the next hub, which will be utilized to close the loop for our regional network in Europe. This project would represent the first significant European resource recovery facility to produce key battery-grade products, including nickel, cobalt and lithium from recycled battery content.

轉到幻燈片 11。我們很高興地宣布與 Glencore 建立合作夥伴關係，共同研究在意大利 Portovesme 的現有 Glencore 工廠建設新樞紐的可行性。根據我們的方法，我們正在通過開發下一個樞紐將我們的模塊化戰略從北美擴展到歐洲，該樞紐將用於關閉我們在歐洲的區域網絡的循環。該項目將代表歐洲第一個重要的資源回收設施，用於從回收電池中生產關鍵電池級產品，包括鎳、鈷和鋰。

Turning to Slide 12 for details on the partnership arrangement. As detailed in our May 9 announcement, Li-Cycle and Glencore anticipate forming a 50-50 joint venture to repurpose part of Glencore's existing metallurgical complex in Portovesme, Italy and they were a cost-efficient accelerated development plan. Li-Cycle will lead a definitive feasibility study, or DFS, which is expected to be completed by mid-2024. Subject to a final investment decision, the project is expected to start commissioning in late 2026 to early 2027. The black mass process at the Portovesme Hub is expected to be supplied from Li-Cycle's growing European Spoke network and through Glencore's commercial network.

轉到幻燈片 12 了解有關合作安排的詳細信息。正如我們在 5 月 9 日的公告中所詳述的那樣，Li-Cycle 和 Glencore 預計將組建一個 50-50 的合資企業，以重新利用 Glencore 在意大利 Portovesme 的現有冶金聯合體的一部分，這是一項具有成本效益的加速開發計劃。 Li-Cycle 將領導最終可行性研究，或 DFS，預計將於 2024 年年中完成。根據最終投資決定，該項目預計將於 2026 年底至 2027 年初開始調試。預計 Portovesme Hub 的黑料工藝將由 Li-Cycle 不斷增長的 European Spoke 網絡和 Glencore 的商業網絡提供。

The plant will leverage Li-Cycle state-of-the-art hydrometallurgical technology and is expected to have a processing capacity of up to 50,000 to 70,000 tonnes of black mass annually or the equivalent of up to 600,000 electric vehicles per year. Finally, the project contemplates competitive long-term financing from Glencore to fund Li-Cycle's full share of the capital investment. In summary, our partnership with Glencore enables an accelerated pathway to a Europe-based refining facility, providing us with the opportunity to benefit from the capabilities of our partners.

該工廠將利用 Li-Cycle 最先進的濕法冶金技術，預計年處理能力高達 50,000 至 70,000 噸黑色物質，相當於每年高達 600,000 輛電動汽車。最後，該項目考慮從 Glencore 獲得有競爭力的長期融資，以資助 Li-Cycle 的全部資本投資份額。總而言之，我們與嘉能可的合作夥伴關係加快了建立歐洲煉油廠的步伐，使我們有機會從合作夥伴的能力中獲益。

Turning to Slide 13 to conclude on our complementary capabilities. By allowing Li-Cycle's sustainable patented technology and European Spoke network with Glencore's extensive commercial network, we expect the Portovesme Hub to bring Europe one step closer to closing the loop for lithium-ion batteries.

轉到幻燈片 13 來總結我們的互補能力。通過將 Li-Cycle 的可持續專利技術和 European Spoke 網絡與 Glencore 廣泛的商業網絡相結合，我們預計 Portovesme Hub 將使歐洲更接近關閉鋰離子電池的循環。

I would now like to hand it over to Debbie for a financial review.

我現在想把它交給黛比進行財務審查。

Thank you, Tim.

謝謝你，蒂姆。

Turning to Slide 14. Before reviewing our first quarter financial results, I would like to discuss the evolution of Li-Cycle's revenue and financial profile. Resource input battery materials at a discount to metal prices from a diverse pool of customers. Currently, and for the near term, we produce and sell black mass under contractual arrangement. This results in black mass revenues that are based on current metal prices at the point of sale. It's important to note is that the sale of black mass is only an interim strategy. Indeed, our mid- to long-term goal is to utilize our black mass production and speed stock for the Hub, which will manufacture battery grade materials, including lithium, cobalt and nickel, unlocking significant incremental value.

轉到幻燈片 14。在回顧我們第一季度的財務業績之前，我想討論一下 Li-Cycle 的收入和財務狀況的演變。以低於金屬價格的價格從不同的客戶群體中獲取輸入電池材料。目前，在短期內，我們根據合同安排生產和銷售黑色物質。這導致基於銷售點當前金屬價格的黑色大量收入。重要的是要注意，黑色質量的銷售只是一種臨時策略。事實上，我們的中長期目標是利用 Hub 的黑色量產和高速庫存，這將製造電池級材料，包括鋰、鈷和鎳，釋放顯著的增量價值。

The operationalization of our Rochester Hub represents the key step change in Li-Cycle's evolution towards producing these battery-grade materials as seen on the top right chart. Utilizing the forecasted underlying metal prices on the bottom right and applying a premium to reflect the production of battery-grade finished products should give you a sense of the significant inflection point we anticipate in our revenue profile.

如右上圖所示，我們羅切斯特樞紐的投入運營代表了 Li-Cycle 朝著生產這些電池級材料的方向發展的關鍵步驟變化。利用右下角的預測基礎金屬價格並應用溢價來反映電池級成品的生產，應該可以讓您了解我們預計收入狀況中的重要拐點。

Turning to Slide 15 for a discussion of our first quarter results. As seen on the top left chart, we produced 1,853 tonnes of black mass, more than double the level achieved in the prior year. Driven by the start-up of operations at our Arizona and Alabama Spokes and the upgrade of our New York Spoke. We sold 881 tonnes of black mass reflecting about a 14% increase versus the 774 tonnes sold in the prior year due to the addition of new commercial customers and higher production in sales from our Spoke facilities.

轉到幻燈片 15 討論我們的第一季度業績。如左上圖所示，我們生產了 1,853 噸黑色物質，是去年的兩倍多。受亞利桑那州和阿拉巴馬州輻條業務啟動以及紐約輻條升級的推動。由於新商業客戶的增加以及我們 Spoke 工廠銷售額的增加，我們售出了 881 噸黑色物質，較上年售出的 774 噸增加了約 14%。

Moving to revenue for the period. As a reminder, our revenues are influenced by market prices of metals contained in our products, notably cobalt and nickel with no value attributed to lithium content at this time, as we continue to sell black mass as an intermediate product. Revenue from product sales and recycling services before fair market value adjustments increased by 114% year-over-year to $7.7 million versus $3.6 million in the prior year. This was primarily attributable to the higher product sales volume from the expansion of our customer base, expanding operations of the Spoke facilities and the benefit of a higher product sales value mix.

轉向該期間的收入。提醒一下，我們的收入受到我們產品中所含金屬的市場價格的影響，尤其是鈷和鎳，目前與鋰含量無關，因為我們繼續將黑色物質作為中間產品銷售。公平市場價值調整前的產品銷售和回收服務收入同比增長 114% 至 770 萬美元，而上年為 360 萬美元。這主要是由於我們的客戶群擴大、Spoke 工廠運營擴大以及產品銷售價值組合提高帶來的產品銷量增加。

Total revenue was $3.6 million compared to $8 million in the prior year. This included an unfavorable noncash fair market value adjustment of $4.1 million on product revenue, driven by lower nickel and cobalt prices versus a favorable fair market value adjustment of $4.4 million in the prior year.

總收入為 360 萬美元，而上一年為 800 萬美元。這包括因鎳和鈷價格下跌而對產品收入進行 410 萬美元的不利非現金公平市場價值調整，而上一年有利的公平市場價值調整為 440 萬美元。

Turning to Slide 16 for an update on our cash flow and a review of the strength of our balance sheet. Reviewing our favorable track record beginning in March of last year, we had a cash balance of $527 million. During the 9 months between March 2022 and year-end, we secured key strategic funding of $250 million from LG and Glencore and deploy $177 million towards the construction of our Rochester Hub and our Spoke facilities. Notably, we ended 2022 with a similar level of cash with approximately $520 million of cash on hand.

轉到幻燈片 16，了解我們現金流量的最新情況以及對資產負債表實力的審查。回顧我們從去年 3 月開始的良好記錄，我們的現金餘額為 5.27 億美元。從 2022 年 3 月到年底的 9 個月裡，我們從 LG 和 Glencore 獲得了 2.5 億美元的關鍵戰略資金，並部署了 1.77 億美元用於建設我們的 Rochester Hub 和我們的 Spoke 設施。值得注意的是，到 2022 年年底，我們的現金水平與此類似，手頭現金約為 5.2 億美元。

During the first quarter of 2023, we invested $86 million to fund our network growth, focused on the Rochester Hub, ending the period with $409 million of cash on hand. With a conditional loan of $375 million from the Department of Energy, our current pro forma cash balance would be in excess of $780 million.

在 2023 年第一季度，我們投資了 8600 萬美元來資助我們的網絡增長，重點是 Rochester Hub，在該期間結束時手頭現金為 4.09 億美元。有了能源部 3.75 億美元的有條件貸款，我們目前的備考現金餘額將超過 7.8 億美元。

Turning to Slide 17. With our first quarter results keeping us on track, we are reaffirming our key business outlook metrics for 2023.

轉到幻燈片 17。隨著我們第一季度的業績讓我們走上正軌，我們重申了 2023 年的關鍵業務前景指標。

And finally, turning to Slide 18 for closing. We are advancing the Rochester Hub construction remaining on schedule and on track to commence commissioning in late 2023. Expanding our global network of Spokes & Hubs specifically replicating our successful North American business model in Europe, with three Spokes and plans for a new Hub and an option for funding and strategic commercial partnerships. Enhancing our global position as a preferred recycling partner with [going diverse] global battery supply chain participants and strengthening our balance sheet and adding flexibility to under future network goals with the Department of Energy loans expected to close mid-2023.

最後，轉到幻燈片 18 結束。我們正在按計劃推進羅切斯特樞紐的建設，並按計劃在 2023 年底開始調試。擴大我們的全球輻條和樞紐網絡，特別是在歐洲複製我們成功的北美商業模式，包括三個輻條和一個新樞紐和一個新樞紐的計劃資金和戰略商業夥伴關係的選擇。加強我們作為全球電池供應鏈參與者的首選回收合作夥伴的全球地位，並加強我們的資產負債表並增加未來網絡目標的靈活性，能源部貸款預計將於 2023 年年中結束。

That concludes our formal remarks. Operator, we are ready to take questions.

我們的正式發言到此結束。接線員，我們準備好接受提問了。

(Operator Instructions) Our first question comes from Brian Dobson with Chardan Capital Markets.

（操作員說明）我們的第一個問題來自 Chardan Capital Markets 的 Brian Dobson。

Two quick questions on the Hub facilities. So first, in Rochester, we're very excited to see that facility opening. Can you talk a little bit about the commission approval process that might take place after the opening? And how long it will take to get black mass running through that facility, what that processing ramp looks like?

關於 Hub 設施的兩個快速問題。所以首先，在羅徹斯特，我們很高興看到該設施的開放。你能談談開幕後可能發生的佣金審批程序嗎？讓黑色物質通過該設施需要多長時間，處理坡道是什麼樣的？

That's going for Tim to handle.

這將由蒂姆來處理。

It's nice to be talking to you. Specifically in relation -- sorry, just in relation to the commissioning process. So we're still on track to start commissioning by the end of this year. As we've discussed previously, commissioning will commence in stages. And then we will gradually be introducing reagents and black mass as part of the final stages of commissioning, which will happen during the course of -- or into 2024. In terms of additional approvals, There's no additional approvals that are required. It's simply a matter of now completing the project and starting it up as we get closer to the timing for start-up, we will come back to you with a more detailed plan around conditioning and ramp up. We just want to make sure that we are at the right level of definition when we do that. So more to come on that one, Brian. I know it's important to you, but everything is looking good at this point.

很高興和你說話。特別是關於 - 抱歉，只是關於調試過程。因此，我們仍有望在今年年底前開始調試。正如我們之前所討論的，調試將分階段開始。然後我們將逐步引入試劑和黑色物質作為調試最後階段的一部分，這將在 2024 年或 2024 年進行。就額外批准而言，不需要額外批准。現在只需完成項目並在我們接近啟動時間時啟動它，我們將返回給您更詳細的調節和提升計劃。我們只是想確保我們在這樣做時處於正確的定義級別。布賴恩，還有更多的事情要做。我知道這對你很重要，但目前一切看起來都很好。

Yes, very good. And then very exciting news in Europe regarding your partnership with Glencore. Can you maybe point to some of the things you learned during the development of the Rochester Hub that could make this a smoother process in opening up a potential new facility or rather retrofitting the facility that you were discussing?

是的，很好。然後在歐洲有關於您與 Glencore 合作的令人振奮的消息。您能否指出您在羅切斯特中心開發過程中學到的一些東西，這些東西可以使這個過程更順利地開放一個潛在的新設施，或者更確切地說是改造您正在討論的設施？

Absolutely. I'm happy to take that one as well, Brian, and then Ajay and Debbie, please feel free to add on as required. So I think a couple of key things. What has worked really well for us in North America that we expect to implement in Italy has been our procurement and execution strategy. So if you think back to what we've been talking about now for almost a couple of years has been our approach to make sure that we have materials and equipment available on site, well ahead of when they're needed. And our plan will be to execute on a similar path. And that really takes a lot of the risk out of the execution schedule.

絕對地。我也很高興接受那個，Brian，然後是 Ajay 和 Debbie，請根據需要隨意添加。所以我認為有幾個關鍵的事情。我們希望在意大利實施的對我們在北美非常有效的是我們的採購和執行戰略。因此，如果你回想一下我們近幾年來一直在談論的事情，我們的方法就是確保我們在現場有可用的材料和設備，遠遠早於需要它們的時間。我們的計劃將按照類似的路徑執行。這確實消除了執行計劃中的很多風險。

From a technical perspective, we are utilizing a number of the same unit operations that we are utilizing in Rochester. So all the lessons that we've gathered through the detailed engineering phase in Rochester, we'll be able to roll directly into the design as part of the base case, as for Portovesme, and I think what's going to be really very beneficial is the fact that by the time we're starting up Portovesme, we would have already been operating Rochester for some time. So we'll be able to bring across all that operational understanding into the new facility as well. So what we're overall expecting to see is a more expedient, more efficient execution plan for Portovesme.

從技術角度來看，我們正在使用我們在羅切斯特使用的許多相同的單元操作。因此，我們在羅徹斯特的詳細工程階段收集的所有經驗教訓，我們將能夠作為基本案例的一部分直接融入設計，至於 Portovesme，我認為真正非常有益的是事實上，當我們啟動 Portovesme 時，我們已經在 Rochester 運營了一段時間。因此，我們也能夠將所有對運營的理解帶入新設施。因此，我們總體上希望看到的是一個更方便、更有效的 Portovesme 執行計劃。

Our next question comes from Matthew O'Keefe with Cantor Fitzgerald.

我們的下一個問題來自 Matthew O'Keefe 和 Cantor Fitzgerald。

So congrats on moving things ahead as you've done. I just had a quick question on the -- as we're building out the Hub, how is your -- how are you feeling about the Spoke performance? Maybe you could tell us a little bit there on, is it meeting your expectations with respect to recoveries of black mass, costing as far as cost of raw materials, I know they've gone up a little bit. Maybe you could talk a bit about that as well. And then also what we see as far as -- is there a big benefit to being a capacity at these Spokes? Or is it fairly going to be a fixed cost operation?

所以祝賀你像你所做的那樣向前推進。我只是有一個簡短的問題 - 在我們構建 Hub 時，你的 - 你對 Spoke 性能的感覺如何？也許你可以告訴我們一點，它是否滿足你對黑色物質回收的期望，就原材料成本而言，我知道它們已經上漲了一點。也許你也可以談談這個。然後還有我們所看到的——成為這些輻條的能力有很大的好處嗎？或者它是否公平地成為固定成本運營？

Another for Tim to address.

蒂姆要解決的另一個問題。

Yes, no problem. So a few things to address that. So let me work through it systematically for you, Matthew. So first of all, from a recovery perspective, I would say that the Spokes are performing very well. We've seen improvement generation over generation of both plants and now with our Generation 3 plants in Arizona and Alabama which are by the same plants that we're installing in Europe. We have our highest recovery rates across any of our assets to date, which is in line with our expectations and doing very well.

是沒有問題。所以有幾件事可以解決這個問題。因此，讓我為您系統地完成它，馬修。所以首先，從恢復的角度來看，我會說輻條表現非常好。我們已經看到這兩個工廠的一代又一代的改進，現在我們在亞利桑那州和阿拉巴馬州的第 3 代工廠與我們在歐洲安裝的工廠相同。迄今為止，我們所有資產的回收率都是最高的，這符合我們的預期並且做得很好。

In terms of costing of raw sales, we don't disclose publicly details around costing of raw materials except for the say that we have seen some price relief for input materials as commodity prices have come down, and that really talks through the fact that we are very much (inaudible) in and outside of the business when it comes to commodity price movements, which gives us some protection, as you mentioned, that we benefit by being able to link those two markets together. From our side, we see this as being a relatively constant margin spread business in the long run. So it doesn't have a big impact on us.

在原材料銷售成本核算方面，我們不會公開披露有關原材料成本核算的詳細信息，只是說隨著大宗商品價格下降，我們看到輸入材料的價格有所下降，這確實說明了我們當談到商品價格變動時，在業務內外（聽不清），這給了我們一些保護，正如你提到的，我們通過能夠將這兩個市場聯繫在一起而受益。從我們的角度來看，從長遠來看，我們認為這是一項相對穩定的利潤率業務。所以對我們影響不大。

Just on that, I was just wondering if the (inaudible) disconnect between -- or the difference between the black mass produced and black mass sold. Was that due to timing of sales? Or are you starting to stockpile now?

就此而言，我只是想知道（聽不清）之間是否存在脫節——或者黑色質量生產和黑色質量銷售之間的差異。這是由於銷售時間的原因嗎？或者你現在開始囤貨？

Great question. So no, it was mostly due to timing from our downstream customers and what was happening at their assets, we don't expect to see it continuing into Q2. So you should expect sales in Q2 to reflect the drawdown on this volume. We are planning as said previously, to stockpile some black mass this year, but it will be targeted towards the back end of this year.

很好的問題。所以不，這主要是由於我們下游客戶的時間安排以及他們的資產發生的事情，我們預計它不會持續到第二季度。因此，您應該預計第二季度的銷售額會反映出這一銷量的下降。如前所述，我們計劃在今年儲存一些黑色物質，但目標是在今年年底。

And then, Matt, just to address your question as well. I know Tim is going to jump in there around the feed side. And Tim, I can start that and you should add on. I think, look, at the end of the day, we're operating our assets in lockstep with market demand and customer timing. So we can flex that as we see fit. Ultimately, these are assets to feed the Rochester Hub and has now announced and are going to be doing some work on the Portovesme Hub in Europe. So that's the focus is making sure that we have ample feed, as we've articulated and lockstep with that ramp-up timing for that assets.

然後，馬特，也只是為了解決你的問題。我知道蒂姆會在進料端跳進去。蒂姆，我可以開始了，你應該補充一下。我認為，看，在一天結束時，我們正在根據市場需求和客戶時機來運營我們的資產。所以我們可以在我們認為合適的時候調整它。最終，這些是為羅切斯特中心提供資金的資產，現在已經宣布並將在歐洲的 Portovesme 中心開展一些工作。因此，重點是確保我們有充足的飼料，因為我們已經闡明並鎖定了該資產的加速時間。

(Operator Instructions) Our next question comes from Jeff Osborne with TD Cowen.

（操作員說明）我們的下一個問題來自 TD Cowen 的 Jeff Osborne。

Just a couple of questions on my side. On the DOE side, I was wondering what the remaining milestones and conditions are to hit? I think you originally were targeting 2Q for that loan. And now I think the [verbiage], at least is mid-'23, not a big change, but I'm just curious, maybe you could walk us through if there is any delay there and then what the remaining milestones are would be helpful.

我這邊只有幾個問題。在 DOE 方面，我想知道剩餘的里程碑和條件是什麼？我認為您最初的目標是 2Q 獲得那筆貸款。現在我認為 [verbiage]，至少是 23 年中期，不是一個大的變化，但我只是好奇，如果那裡有任何延遲，也許你可以帶我們過去，然後剩下的里程碑是什麼有幫助。

Sure, Jeff. And I can start on that and Debbie can add on as needed. So no, in short, nothing major in terms of hurdles remaining to close. We, as you articulated, we're on track. Look, I mean, a lot of this is just documentation. It's really a core loan agreement, a range of ancillary agreements, closing certificates, legal opinions, you can imagine. So that's the sort of work that's ongoing, which is really a lift on the legal side primarily. One nuance there around conditions and just broadly speaking about the DOE from our program's office. Sometimes for some companies, they do have, for example, conditions on permits to close. In Li-Cycle's case, we have our key operational permits for the Rochester Hub. So that is not a condition for us. So sometimes there's externalities that affect closing timing. For us, it's really just doing the work around the legal documentation.

當然，傑夫。我可以開始，Debbie 可以根據需要添加。所以不，簡而言之，就尚待解決的障礙而言，沒有什麼大不了的。我們，正如你所表達的那樣，我們正在走上正軌。看，我的意思是，其中很多只是文檔。這真的是一個核心貸款協議，一系列的附屬協議，關閉證書，法律意見，你可以想像。所以這就是正在進行的工作，這實際上主要是在法律方面的提升。關於條件的細微差別，只是從我們項目辦公室廣泛談論 DOE。有時對於一些公司來說，他們確實有關閉許可的條件。就 Li-Cycle 而言，我們擁有 Rochester Hub 的關鍵運營許可。所以這不是我們的條件。所以有時會有影響關閉時間的外部因素。對我們來說，它實際上只是圍繞法律文件進行工作。

I agree. Actually, and its really just the volume of the administrative task in getting it all paper on both sides, their side and us.

我同意。實際上，這真的只是讓雙方（他們和我們）都獲得所有文件的管理任務量。

Got it. And then maybe just another modeling related question. On the OpEx side, it was a bit higher than we were expecting on our end, at least. How do we think about were there any onetime issues this quarter? Or is this sort of the new run rate and we should expand that through the second half of the year? What's the cadence of spend there?

知道了。然後可能只是另一個與建模相關的問題。在 OpEx 方面，它至少比我們預期的要高一點。我們如何看待本季度是否存在任何一次性問題？還是這種新的運行率，我們應該將其擴展到今年下半年？在那裡消費的節奏是什麼？

Yes. It seems to be breaking out between kind of OpEx. So if you recall the way (inaudible) the bottom line of the P&L, is to separate the fact that our revenue was maybe a little bit lower and that difference between production and revenue and that timing issue. So there isn't really as much of a pull-through from that. But if you isolate SG&A in the core spend, and back out on noncash items like share-based comp and depreciation, what you see actually, if you look across from about Q3 last year, which I indicated kind of Q3, Q4 last year was a good run rate for the business. What you see if you look through Q3, Q4 and then into this year. And I think mainly the fact that with the transition period that was 2 months and not 3 months is throwing a little bit of confusion into the equation. But if you look successively at those three quarters, and we're really around that sub-30 million on, below $30 million a quarter, which is quite consistent.

是的。它似乎在某種 OpEx 之間爆發。因此，如果您還記得（聽不清）損益底線的方式，就是將我們的收入可能略低這一事實與生產和收入之間的差異以及時間問題分開。因此，實際上並沒有那麼多的推動力。但是，如果你在核心支出中分離出 SG&A，並退出非現金項目，如基於股份的補償和折舊，你實際上看到的是，如果你看一下去年第三季度，我指出去年第三季度，第四季度是良好的業務運行率。如果你回顧第三季度、第四季度，然後進入今年，你會看到什麼。我認為主要是過渡期為 2 個月而不是 3 個月這一事實給等式帶來了一些混亂。但如果你連續看這三個季度，我們真的在 3000 萬以下，每季度低於 3000 萬美元，這是非常一致的。

Got it. And then just going back to the inventory build question, I appreciate it for this quarter, but how do we think about the second half of the year? Do you expect that there would be a period of time where you -- all production is kept the feed to be, so to speak, when the Hub ramps up? Or are you contractually required to sell a minimum amount? I'm just trying to think about how we should model that inventory build to feed the Hub as you're commissioning that.

知道了。然後回到庫存構建問題，我很欣賞這個季度，但我們如何看待下半年？你是否期望有一段時間你 - 所有生產都保持提要，可以這麼說，當 Hub 增加時？或者您是否根據合同要求銷售最低數量？我只是想考慮我們應該如何為庫存構建建模，以便在您調試時為 Hub 提供數據。

We have some contractual minimums, but that's not a blocker to any of these strategies. I would think of it as kind of tail-end of this year where we'll begin that. But I think we talked about this a little bit in the transition period. I think what's truly important is we've been very, very thoughtful about the pace, right? So we have a plan that takes this to a point where we have sufficient inventory, sorry, and enough backup to start that commissioning and that ramp up. And then from there, once we get into that, we do what you really see is the majority of production will load inventory. But what we've actually worked through the plan to build the inventory but actually build the production level that of spoke at the same time to create that level that we need once the Hub really starts to kick in.

我們有一些合同最低限度，但這並不妨礙任何這些策略。我認為這是今年的尾聲，我們將在今年開始。但我想我們在過渡時期談過一點。我認為真正重要的是我們對節奏非常非常深思熟慮，對吧？因此，我們有一個計劃，使我們有足夠的庫存，對不起，和足夠的備份來開始調試和增加。然後從那裡開始，一旦我們進入這個階段，我們就會做你真正看到的事情，即大部分生產將裝載庫存。但是，我們實際上已經完成了構建庫存的計劃，但實際上同時構建了生產水平，以創建一旦 Hub 真正開始啟動後我們需要的水平。

Jeff, it's really a gradual -- more of a gradual green.

傑夫，它真的是一個漸進的——更像是一個漸進的綠色。

(Operator Instructions) And there are no further questions in queue at this time. I'll now turn the floor back over to Ajay Kochhar for any additional or closing remarks.

（操作員說明）此時隊列中沒有其他問題。現在，我將把發言權轉回給 Ajay Kochhar，請他發表任何補充意見或結束髮言。

Thank you, Todd. So we continue to execute on our Spoke & Hub strategy, establishing a global footprint with local networks in North America and Europe. Our strategy is supported by the growing portfolio of key battery material global market participants, selecting Li-Cycle as their preferred recycling partner coupled with strategically timed and cost-effective funding sources. The team is focused on delivering significant value to our key stakeholders with key financial inflection expected upon the operationalizing of our Rochester Hub. And of course, we appreciate your time and support of Li-Cycle. We look forward to updating you on our progress as we move forward. Thank you.

謝謝你，托德。因此，我們繼續執行我們的 Spoke & Hub 戰略，通過北美和歐洲的本地網絡建立全球足跡。我們的戰略得到了全球主要電池材料市場參與者不斷增長的投資組合的支持，他們選擇 Li-Cycle 作為他們首選的回收合作夥伴，以及戰略性的時間和成本效益的資金來源。該團隊專注於為我們的主要利益相關者提供重要的價值，預計在我們的羅徹斯特中心投入運營後會出現關鍵的財務變化。當然，我們感謝您的時間和對 Li-Cycle 的支持。我們期待著在我們前進的過程中向您更新我們的進展。謝謝。

Thank you. This concludes today's call and webcast. You may disconnect your line at this time, and have a wonderful day.

謝謝。今天的電話會議和網絡廣播到此結束。您可以在此時斷開您的線路，並度過美好的一天。